Coming of age – has trading of the renminbi reached a pivotal point?

Caroline Henshaw reports on the development of rapidly growing Renminbi hubs around the world where trading volumes are now starting to surge and explores the role e-banking and e-trading channels will play in facilitating the future development of the RMB market.

China’s growing economic and political clout has seen the RMB grow to become one of the world’s most important currencies, on the brink of inclusion in the IMF’s special drawing rights basket. But experts say the central bank’s shock devaluation in August could prove a tipping point from the RMB, as investors and companies adjust realise the huge opportunities it presents. On August 11, the People’s Bank of China cut the RMB’s daily reference against the US dollar by 1.9%, roiling investors around the world and setting off a chain of events that saw global markets – from currencies to commodities – suffer their worst rout since the financial crisis. The bank said the cut was part of a move toward a more market-oriented system for calculating the yuan’s daily fixing rate. Now the officials that set the mid-point around which the currency can fluctuate by 2% each day will take into account the previous close, foreign exchange supply and demand, and the...continued

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